Cue Energy reports Indonesian operations

The following is an edited excerpt from Australian energy firm Cue Energy Resources? quarterly report ended June, 2011 released on Tuesday.

Sampang PSC - Madura Strait (15% interest)
Operator: Santos

Oyong Field
Oil production continued at a total rate of 2,700 bopd which is above the original forecast rate. Cue?s share of oil sales receipts was 36,677 barrels which generated A$3.9l million in revenue received during the quarter. Cue?s share of gas sales receipts was 737 million cubic feet which generated A$l.86 million in revenue received during the quarter.

Wortel Field
The Wortel gas field development is progressing to plan, all detailed engineering, and fabrication of the legs of the wellhead platform, have been completed, targeting first gas production in late 2011. The combined Oyong and Wortel gas production rate is expected to be around 90 mmscf per day. Oyong is currently producing around 60 MMscf per day.

Mahakam Hilir PSC (40% interest)
Cue has, subject to government approvals, agreed to acquire a 40% interest in the Mahakam Hilir PSC in the prolific Kutei Basin, onshore Kalimantan, Indonesia (PSC) from SPC Mahakam Hilir Pte Ltd (SPC), the operator holding 100% interest in the Mahakam Hilir PSC. Under the farm-in agreement with SPC, Cue will earn its interest by refunding 40% of the past costs to SPC where 200km of newly acquired 2D seismic has been the operator?s only major expenditure to date.

The prospect inventory includes two drill-ready prospects and numerous upside exploration objectives which were identified on the new 2D seismic data.

A drilling programme will commence in Q4 2011, and planning, selection and ordering of long lead and earth- working operations has commenced.

The Naga Selatan (Southern Dragon) prospect will be drilled first. This is an oil prospect and lies along trend of the historic Sei Nangka and South Pelarang oil fields. The multiple targets are shallow, located at approximately 1500mTVD. The prospect is estimated to contain approximately 71 million barrels stock tank oil initially in place, (P50).

The Naga Utara (Northern Dragon) prospect is situated adjacent to the Sambutan Gas Field which currently produces around l0mmcfd. Naga Utara is a gas prospect which is close to existing infrastructure and market opportunities. The prospect is estimated to contain approximately 108 bcf of gas initially in place, (P50). (end of edited excerpt)